Repurposing America’s cities

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Nothing will rev up a city’s tax base faster than clearing blight and bringing abandoned properties back onto the tax rolls. The New York Times describes the problem:

In all, more than half of the nation’s 20 largest cities in 1950 have lost at least one-third of their populations. And since 2000, a number of cities, including Baltimore, St. Louis, Pittsburgh, Cincinnati and Buffalo, have lost around 10 percent; Cleveland has lost more than 17 percent; and more than 25 percent of residents have left Detroit, whose bankruptcy declaration this summer has heightened anxiety in other postindustrial cities.

The result of this shrinkage, also called ‘ungrowth’ and ‘right sizing,’ has been compressed tax bases, increased crime and unemployment, tight municipal budgets and abandoned neighborhoods. The question is what to do with the urban ghost towns unlikely to be repopulated because of continued suburbanization and deindustrialization.

For muniland, this is a big question. Federal and state financial support for urban areas continues to shrink and communities have to find local solutions. Quietly and persistently, their efforts seem to be gaining momentum.

Although Detroit has received headlines for its plans to level entire neighborhoods, there are also efforts to stabilize some areas. From ModelD.com:

The Detroit Land Bank, working with $20 million in Neighborhood Stabilization Program funds, is patiently carrying out the Detroit Future City plan by remodeling houses and demolishing others. It may seem relatively insignificant, but one restored house or demolished property may be the key to stabilizing a middle class neighborhood in the city.

That, perhaps, is the most remarkable aspect of the organization’s mission: shoring up the middle class in Detroit. The Land Bank collaborated with homeowner associations in the Boston-Edison and East English Village neighborhoods, which are populated by middle-class households. A vacant home or lot there significantly lowers property values and may sway a prospective buyer from purchasing there.

Philadelphia just completed legislation for a land bank to get its 40,000 vacant properties back in use. NBC 10 Philadelphia describes the effort:

The basic idea of the land bank is that it serves as a centralized entity that can efficiently handle maintenance, sale and redevelopment of properties that were owned and managed by a slew of city agencies and private parties — all with their own processes and expectations.

The land bank would allow anyone who wants to develop or re-purpose any of the city’s 40,000 or so vacant properties or land, to deal with one strategic authority rather than many.

It used to take years to acquire land for redevelopment and to buy three or four properties next to each other you might have to go through three or four entities. The land bank should speed up the time period for land development and make it less confusing and easier because there is only a single entity to buy the land from.

‘It’s a public good,’ Sauer said. ‘These vacant properties right now are dragging down the values of adjacent homeowners, costing the city over $20 million a year just to maintain and in most cases they’re not paying taxes so they are a drain on the city’s services and resources.’

New York City’s former Mayor Michael Bloomberg just gave cash awards to 22 cities through the Bloomberg Cities of Service program. 11 of these cities chose to use the money to clean up blighted areas including:

Fall River, MA Mayor William Flanagan will revitalize 25 city blocks by removing 60,000 pounds of trash and hundreds of square feet of graffiti

Flint, MI Mayor Dayne Walling will revitalize 40 city blocks and 200 parcels of land by removing two million pounds of litter, creating green spaces, and boarding up abandoned houses; and help 1,200 households prepare for emergencies

Are cities thinking big enough about how to repurpose vacant land and properties? The Chicago Tribune asked readers how to revitalize the city, and it got 700 responses: Here are a few:

Think big, then bigger: Create a string of indoor hydroponic plant farms, financed by TIF funds, establishing Chicago as a leader in the industry. Cluster enterprise zones around sewage treatment plants for industries that need vast amounts of water but not potable water. Chicago, perched on Lake Michigan, is also a perfect place for a global fresh water research center, drawing on the talents and assets of companies, institutions and universities.

Restoring and repurposing cities can be done on a small, organic scale, one neighborhood at a time. American cities are long overdue for a refurbishment.

Author Profile

I’m Cate Long and I write about the retail fixed income markets including municipal bonds. My primary interest is creating tools and systems to help retail investors understand bond markets. I’ve worked for a number of years with industry standards organizations, regulators and Congress to help craft a more transparent and fair framework for investors to participate in the fixed income markets. I'm a guest contributor to Reuters.com. Any opinions expressed are mine alone.